ComBank 2Q profit soars despite surge in loss provisions

Commercial Bank of Ceylon PLC pushed growth with more vigour during the three months to June 2021 (2Q21) as the largest private sector lender gave more loans, improved asset quality and margins to deliver some robust financial performance. 

The bank reported net interest income of Rs.15.7 billion in the April-June quarter, up 57 percent from a year ago as interest incomes rose with the accelerated pace of loans. 

Meanwhile, the interest expenses declined as deposits re-priced at lower rates while the bank added more low cost deposits into its portfolio. 

As a result, the bank reported a net interest margin of 3.36 percent compared to 3.17 percent at the start of the year. 

The bank with assets of Rs.1.9 trillion gave new loans and advances worth of Rs.47.3 billion in the three months, taking the cumulative six months loans to Rs.72.1 billion, helping the bank to become the first private lender to cross the trillion rupee loans milestone. 

The bank’s reported gross non-performing loans ratio, a key gauge of the asset quality, was at 4.97 percent, down from 5.11 percent at the beginning of the year.  

However, the bank provided a massive Rs.6.5 billion for possible loans and other losses in the quarter compared to Rs.2.6 billion in the same period last year, reflecting its preparedness to confront even higher loan defaults in future as a result of the fresh economic malaise inflicted by the faster spread of the virus at present, that directly affects the borrowers’ capacity to regularly service their loans.